Income Policy #3: School Choice
Updated: Sep 8
Give families the tuition and let schools complete for students.
Original Proposal: The Myth of American Inequality: How Government Biases Policy Debate
-Phil Gramm, Robert Ekelund, John Early
Proposal: Let the dollar follow the kid. Give parents the money the county spends on their kid's education and let them choose whether to put it towards the public school or a charter.
Competition improves outcomes. Com: together. Petere: to strive toward. To compete, literally, is to strive together toward the same goal.
Competition lit up our country, literally. In the 1880s, Edison and Westinghouse fought bitterly over whose electrical system would win, and the fight is exactly what electrified America decades faster than either company would have alone. Competition works. Everywhere we let it.
So why not education? Somewhere along the way we decided not to strive together for our kids' future. We should.
There's an old joke that if the government made phones, they'd cost a fortune, weigh a ton, arrive late, and not work when they finally showed up. It stuck around for a reason. So I find it strange that we still let the government run one of the most important products in the country: education.
Universal public education once served a purpose. It turned a melting pot of immigrants into a country. But it's outlived its purpose. Today, schooling calcifies our class system, instead of acting as the antidote to it. It's a daycare that locks kids into their parents' future. Education is supposed to be the meritocracy that offers a better life to kids of hard working, blue collar parents.
Over the past 40 years, across all 50 states, the correlation between school spending and student outcomes is just 0.075¹. Think about that as an employer. If you kept paying your employees more and their performance never improved, would you keep raising their pay? But "investing in our youth" is such an appealing phrase that we rarely stop to ask whether the money is improving outcomes.
Aside from the poor returns, evaluating public schools is tough. A life is determined by more than a school. IQ, parents, drive, and zip code all shape outcomes. So how do we judge public schools? We could judge them against private schools, but even that has its flaws.
Private schools require wealth. That's a confounding variable we can't control for. Did a kid get into Harvard because of the private school or because their parents wrote a check to the endowment? Without controlling for financial resources, we can't compare public school to private schools.
Charters solve this problem.
If there's a gold standard for causal inference in education, it's charter schools. Admission to charters is decided by lottery — a natural randomized controlled trial (RCT). Random selection strips out the usual bias: parental wealth, a kid's IQ, their drive, zip code.
It's the same logic farmers use in agricultural trials. Divide a field into small plots, give each plot a different fertilizer, and because the plots are randomly assigned, any difference in crop yield can be attributed to the fertilizer itself, not the soil or the rainfall. Run it across enough plots, and randomness becomes your control. Charter lotteries do the same thing with students: the school is the fertilizer, the kids are the plots.
Results are mixed. One pattern holds: charters aren't uniformly better than public schools, but when they are better, the gains show up most for low-income kids and racial minorities².
KIPP — the Knowledge is Power Program — runs about 200 charter schools nationwide. 96% of its students are Black or Hispanic, and 88% qualify for free lunch. A 2017 Mathematica Policy Research study of a KIPP pre-K lottery followed admitted students against a control group of kids who stayed in public school, over five years³. The results were real: lottery winners moved from the 66th to the 80th percentile in letter-word identification, and from the 47th to the 60th percentile in math.
Success Academy in NYC serves a similarly low-income student population. Its students scored in the top 1% statewide in math and top 3% in English⁴. Among Black students, 93% passed the math exam; among Hispanic students, 95% did. Citywide, only 56% of white students passed. Success Academy runs a "no excuses" model — stricter structure, and it shows up in the results for exactly the kids the traditional system struggles hardest to serve.
In Florida, students who stuck with charter high schools — versus similar charter-middle-school kids who switched to traditional public high schools — were more likely to attend college and earned 12% more in their early 20s⁵.
The second half of this proposal: let families, not districts, decide which school gets their share of the public education budget. If public schools are worth the money, let them prove it.
This is a different kind of anti-inequality policy than we're used to. Most proposals aimed at inequality mean more government, more welfare, more spending. All funded by more taxes. School choice does the opposite: it doesn't ask for a dollar more, it just puts the current dollars to better use. More choice pressures public schools to improve, while giving kids stuck in an outdated system a real way out and into something built for the economy they'll actually enter. No welfare check builds a kid a future the way a genuinely good education does.
Competition — not just institutions — is what makes our society thrive. We already believe this everywhere else: sports, business, even our personal lives. The authors of The Myth of American Inequality make the case for it to be on schooling too. Protecting a system isn't worth a generation of kids. The cost is too high, and it falls hardest on the ones who can least afford to pay it.
Coulson, Andrew. “State Education Trends Academic Performance and Spending over the Past 40 Years.” CATO.Org, 18 Mar. 2014, www.cato.org/sites/cato.org/files/pubs/pdf/pa746.pdf.
Knechtel, Virginia. “Pre-Kindergarten Impacts Over Time: An Analysis of KIPP Charter Schools.” Kipp.Org, 22 Aug. 2017, www.kipp.org/wp-content/uploads/2017/09/KIPP-Pre-K-Impacts-Mathematica.pdf.
Mazzola, Meg. “CREDO at Stanford University Finds That Students In Charter Schools, On Average, Perform Better Academically Than Those Attending Traditional Public Schools.” CREDO, 19 June 2023, credo.stanford.edu/reports/item/national-charter-school-study-iii/.
Riley, Jason L. “New York’s Charter School Revolution Hits a Milestone.” Manhattan Institute, 3 Mar. 2023, manhattan.institute/article/new-yorks-charter-school-revolution-hits-a-milestone.
Booker, Kevin, et al. “Charter high schools’ effects on long term attainment and earnings.” Charter High Schools’ Effects on Long-Term Attainment and Earnings, 2014, https://doi.org/10.2139/ssrn.2443566.
